Green Serbia 2023

Change Is Tough, But Remaining The Same Is Devastating

Global economic transformation is crucial to combat climate change and biodiversity loss. However, governments and businesses tend to prioritise everyday concerns and engage in greenwashing, which is insufficient and damaging. Examples are all around us

The implementation of the European Green Deal in both the EU and the Western Balkans is not only complex, but also challenging. Profound and nuanced views on the pressing issues of our time are provided in the opening interview of this edition, with European Environment, Oceans and Fisheries Commissioner Virginijus Sinkevičius, but also in subsequent interviews. These issues include identifying ways to address climate change, biodiversity loss and pollution amidst fragile growth, unstable market conditions, disrupted global supply chains and conflicts in the region.

It is clear that the fundamental transformation of our global economic model is necessary to address these challenges. However, governments and businesses that are focused on everyday issues, like rising inflation, energy shortages and GDP decline, tend to procrastinate on decisive decisions or engage in greenwashing. This is insufficient to address the existential threat posed by climate change, which is closely linked to biodiversity loss and environmental protection.

Despite the alarming rate of species loss, deforestation, soil damage and ocean warming, global agreements on laws that protect the natural environment are yet to be fully addressed. Commissioner Sinkevičius emphasises how increasingly difficult it will be to sustain our lifestyles and livelihoods without agreement being reached as soon as possible on policies that protect the environment.

G overnments may sign agreements and pledge to protect the environment, but may end up doing the opposite in reality

Even with everything in place, navigating the required changes, such as replacing fossil fuels in production, logistics or households, will remain tremendously complex. Our interviews with Tomislav Mićović, of the National Petroleum Committee of Serbia (NNKS), and Aleksandar Macura, co-founder and programme director of

the RES Foundation, shed light on the multifaceted nature of this process.

While governments are keen to sign agreements on climate change and pledge to protect the environment, in reality they may end up doing the opposite. Dragana Đorđević, from the Institute of Chemistry, Technology and Metallurgy at the University of Belgrade, turns the spotlight on Serbia’s natural wealth and numerous examples of its irreversible destruction. Our conversation with her raises the critical question of whether Serbia should invest in mining operations to underpin growth or refrain from doing so in order to protect nature.

In conclusion, Mićović’s assertion - that “if every percentage of economic growth implies at least the same percentage of growth in the use of natural resources, then there are no existing sources of energy and mineral resources that won’t have negative consequences for life on Earth. That’s why striving for rational, sustainable growth is the most important factor” - emphasises the need to fundamentally transform our global economic model.

Designing Rational, SustainableGrowthIsKey

If every percentage of economic growth implies at least the same percentage of growth in the use of natural resources, there are no existing sources of energy and mineral resources that won’t have negative consequences for life on Earth. That’s why striving for rational, sustainable growth is the most important factor

Despite the Green Agenda for the Western Balkans undoubtedly being high on the list of priorities for both the European Union and the Western Balkans, the complexity of the issues needing to be resolved – at both the level of the EU and that of each individual country of the region - is such that it doubtless requires deep reconsideration.

We discussed these specific topics with Tomislav Mićović, representative of the National Petroleum Committee of Serbia - World Petroleum Council (NNKS-WPC).

You spoke at the recent SET 2023 conference, at which it was concluded that the region still lacks an alternative to gas and coal. From the perspective of the National

Petroleum Committee of Serbia, what are the most important issues being launched under the scope of the implementation of the Green Agenda for the Western Balkans?

The Green Agenda is based on the unique goals of the European Green Deal, but that naturally cannot be applied universally for every country or region. The countries of the Western Balkans also have to individually

TOMISLAV MIĆOVIĆ, REPRESENTATIVE OF THE NATIONAL PETROLEUM COMMITTEE OF SERBIA - WORLD PETROLEUM COUNCIL (NNKS-WPC); SECRETARY GENERAL OF THE ASSOCIATION OF OIL COMPANIES OF SERBIA (UNKS)

COMPLEXITY

Alongside the amending of energy policies, implementing energy transition also implies the amending of policies related to transport, taxation, environmental protection and many other areas

find their own way to achieving these goals, but there are some things that we have in common. I would single out the irrational consumption of energy and the large extent to which coal is represented in the structure of primary energy sources. It could be said that energy efficiency in housing construction, unfortunately, but also fortunately, isn’t at an enviable level. That’s unfortunate because energy is wasted in the vast majority of business properties, public buildings and residences, due to the poor insulation qualities of façades and windows and exterior doors, while it’s fortunate because relatively small investments are required to achieve significant progress in terms of reducing the need for energy to power heating and air conditioning. All the countries of our region, including EU member states, are already working intensively to increase the number of energy interconnections and primarily to modernise electric power systems, in order for the increasing amount of energy produced from renewable sources to be used even more rationally.

Here I will return to the issue of alternative energy, as a universal issue. The world isn’t seeking an alternative to resources that satisfy current consumption, but rather an alternative that will satisfy the permanent appetite for growth of the economy and society as a whole. I personally think the key is in designing rational, sustainable growth. If every percentage of economic growth implies at least the same percentage of growth in the use of natural resources, there are no existing sources of energy and mineral resources that won’t have negative consequences for life on Earth. There has long been debate on the extent to which existing ways of transporting goods and passengers, tourism, but also the fashion industry, are generators of the irrational consumption of energy, while in reality very little has been done to change that. The COVID-19 pandemic allowed the whole world to better observe, for instance, the shortcomings of existing lifestyles and to realise just how fragile

LIMITATIONS

Regardless of whether it’s lithium-ion, sodiumion, or batteries based on some other galvanic cell coupling, the prevailing determination to such a solution only leads down a blind alley

today’s civilisation is. Unfortunately, once the immediate threat of infection abated, the world returned to its old habits fully, without having learnt any lessons when it comes to the use of resources.

Energy transition, which intensified following the decision of the EU to become the first climate-neutral continent, is in itself a form of disruption, which became significantly stronger in 2022, in a clash with the energy market disruption resulting from the war in Ukraine. It will be noted as a peculiarity of our time that coal-fired power plants have been reignited, so to speak, as an

The COVID-19 pandemic allowed the whole world to better observe, for instance, the shortcomings of existing lifestyles and to realise just how fragile today’s civilisation is. Unfortunately, once the immediate threat of infection abated, the world returned to its old habits fully, without having learnt any lessons when it comes to the use of resources

alternative energy source. This all indicates that the goals and deadlines of the Green Agenda will have to be updated much more often than was initially planned.

You don’t believe it will be possible to develop the economy without petroleum for a long time to come. What is the range of energy transition in the scope of such limitations? To what extent does it make sense to encourage shifting to electric vehicles in this context?

Around 95% of energy used in transport worldwide is derived from petroleum. Conversion has been accepted at the global level and is possible, but that nonetheless isn’t merely a matter of replacing vehicles

SIMILARITIES

The irrational consumption of energy, and the large extent to which coal is represented in the structure of primary energy sources, is common to all Western Balkan countries

powered by petroleum derivatives with electric vehicles. Firstly, the very organisation of transport should be made more energy efficient, thereby reduce the need for energy. We should take into consideration the fact that there are not yet sufficiently developed technological solutions for heavy goods vehicles, construction machinery, agricultural and other plant machinery, ships, planes and even military vehicles, none of which will be powered by internal combustion engines. It is then necessary to provide enough green electricity for all electric vehicles, as well as an almost completely new transport and distribution network, because this relates to huge amounts of energy that existing systems wouldn’t be able to ultimately transfer to the consumer.

As such, implementing energy transition also implies – alongside the amending of energy policies – the amending of policies related to transport, taxation, environmental protection and many other areas.

What, in your opinion, are the new technological solutions for the future; and how – in that context – do you see the sustainability of demand for lithium-ion batteries that we would also like to produce?

When it comes to transport, I’m convinced that today, at the end of the first quarter of the 21st century, civilisation has not yet identified a solution for the long-term that’s acceptable in a technological, ecological and energy sense. The last hundred years have been years of development, or rather of the constant technological and ecological advancement of engines and means of transport based on petroleum derivatives. The process of replacing steam engines and horse-drawn carriages with internal combustion engines lasted for a good part of the 20th century. The upcoming conversion won’t take as long, but the first steps, based on batteries, don’t prompt optimism. Regardless of whether it’s lithium-ion, sodium-ion, or batteries based on some other galvanic cell coupling, the prevailing determination to

such a solution only leads down a blind alley. More precisely, batteries, and developing systems to charge them, will have their niche, but they are far from being able to represent a universal solution for all forms of transport and all purposes.

How well adapted was Serbia’s energy policy to handle the challenges that emerged at the global level over the last two years?

That is a combination of challenges that no one had previously faced. There were disruptions before, but this time the situation was further complicated by the mere fact that a second crisis emerged before the previous one had been overcome. Shortcomings that we could no longer brush under the carpet bubbled to the surface. Given the circumstances, we can say that the measures implemented by the state with the aim of mitigating the impact of the energy crisis on the economy and society achieved their objective, because the security of supplies increased and there were no interruptions in supplies of any type of energy. Still, we will now need some time to see the cost of those measures. The petroleum sector, in cooperation with the state, provided a significant contribution to securing the supplying of the Serbian market. Considering that around 80% of the petroleum derivatives consumed in Serbia are obtained from the processing of imported petroleum or are directly imported from refineries in the neighbourhood, Serbia is highly import dependent. The real challenge under the new circumstances was thus to secure enough petroleum and petroleum derivatives, but also to deliver them to Serbia. All these challenges were overcome successfully, so all consumer needs were satisfied fully. However, the effects of the measures didn’t have the same consequences for all segments of the petroleum sector. As a temporary measure, the Regulation on limiting the price of petroleum derivatives achieved the desired effect in the first few months and that measure was utilised by many countries. However, it has been in effect in Serbia for more than a year and, together with the Decision to ban exports that was recently lifted, hindered the operations of part of the market for a good part of 2022

A round 95% of energy used in transport worldwide is derived from petroleum. Conversion has been accepted at the global level and is possible, but that nonetheless isn’t merely a matter of replacing vehicles powered by petroleum derivatives with electric vehicles

and at the beginning of 2023, and some retail segments won’t recover.

Considering that there are a large number of vehicles in our country that don’t satisfy international environmental standards, how does this impact on the range of fuels offered and the quality of the fuel that’s used in Serbia?

The motor fuels that can be found on the Serbian market today comply fully with the prescribed quality of fuel in the European Union. It was ten years ago that Serbia caught up on the applying of valid European standards, when D2 diesel was withdrawn from sale fully. A few years after that, diesel fuel gasoil 0.1, containing a slightly higher percentage of sulphur, was sold as a purpose made fuel for agricultural machinery, but it also hasn’t been available at our filling stations for years.

The quality of fuel is defined by standards and national regulations and isn’t dependent on the structure of the vehicle stock. Regulations governing vehicle exhaust emissions in Europe began being applied in 1993, and each subsequent narrowing of the criteria demanded huge investments in both the automobile and petroleum industries. The offer of Serbia’s petroleum sector doesn’t lag behind that of the EU market, either in terms of product range or fuel quality.

One Of The Pillars OfSustainableDevelopment

NIS has invested more than 900 million euros since 2009 in environmental projects and business initiatives that have had a significant positive impact on the ecological picture of Serbia

In the area of sustainable development, NIS is guided by the UN Sustainable Development Goals, with its operations contributing to the achieving of 12 of those 17 goals. Alongside investing in the development of its business, NIS also invests in CSR projects and human resources, as well as implementing its own “green agenda”.

Modernisation and ecology “side by side”

For NIS, business development and operational diversification cannot be separated from environmental protection. NIS has invested more than 900 million euros since 2009 in environmental projects and business initiatives that have had a significant positive impact on improving the ecological picture in Serbia, with around 120 million euros of that total having been invested in “pure” environmental initiatives.

The best example of this is the deep processing plant at the Oil Refinery in Pančevo, the commissioning of which made it possible to produce greater quantities of the fuels that are the most valuable on the market, as well as the expansion of the product range to include petroleum coke. Very significant environmental effects were also achieved at the same time, because the operations of this modern plant reduce emissions of sulphur dioxide by 98.8 per cent, emissions of particulates by more than 50 per cent and emissions of nitrogen oxides by almost 10 per cent.

NIS also implements environmental projects in other areas of its operations. The company has invested approximately 30 million euros in the Amine plant in Elemir, and the gas processing method is such that it completely prevents emissions of carbon dioxide entering the atmosphere. The Ostrovo gas field produces compressed natural gas, which has been dubbed the fuel of the future thanks to its characteristics,

and solar panels have been installed at eight petrol stations in Serbia, which not only leads to savings on the consumption of electricity, but also contributes to reducing C02 emissions.

Significant advances in the energy field

In the diversifying of its operations, NIS has been striding into the field of energetics since 2013. Small power plants have been constructed on eight oil and gas fields in Serbia, where thermal energy and electricity are produced from gas that was previously torched due to its poorer quality. More than 20 million euros has been invested in these plants.

Moreover, last year, together with its partners, NIS launched the production of electricity at TE-TO Pančevo, representing the first gassteam power plant in Serbia intended for the combined production of electricity and thermal energy based on natural gas, an environmentally friendly fuel. It will produce thermal energy for the needs of the Pančevo Oil Refinery, while electricity will be directed towards Serbia’s electric power system.

Eco initiatives in cooperation with the community

NIS has implemented significant initiatives in the domain of ecology in cooperation with the local community. Under the scope of the “Common Cause Community” programme, 29 projects worth 107.5 million dinars were implemented together with 12 partner cities and municipalities in Serbia in 2021. These initiatives relate to improving energy efficiency, the replacement of heating boilers with more environmentally friendly energy sources, the landscaping of city parks which includes the installation of innovative ecological elements, solar lighting and smart benches as well as the planting of autochthonous plant species.

Company employees, members of the NIS Volunteer Club, also participate in environmental protection activities. They implement campaigns to clean and arrange riverbanks and lakeshores, excursion sites and public green areas, planting trees and educating the youngest members of society on the importance of protecting the natural environment.

ALEKSANDAR MACURA, PROGRAMME DIRECTOR AT THE RES FOUNDATION

CostlyMissed DevelopmentOpportunities

A society that poorly utilises its energy and resources, and that destroys the environment excessively, faces numerous direct and indirect costs. Serbia has behind it an entire series of missed opportunities that cost a lot, but ahead of us there are also ample opportunities to make a thoughtful and measured turnaround

It seems that in Serbia we currently have a collection of varying public policies, some of which benefit energy efficiency, while others represent the opposite. What is good news is that there is lots of room, with the assistance that Serbia and the rest of the Western Balkans receive from the European Union under the scope of the Green Agenda, to implement energy transition in an intelligent, considered and gradual way. We spoke with Aleksandar Macura, programme director at the RES Foundation, about how

to better manage this transition and show more knowledge on the road to the improved utilisation of natural resources and environmental protection.

The IMF mission that visited Serbia recently highlighted the energy sector as one of the priorities that the Government of Serbia should work on in the period ahead. Do you see this as good news connected to energy efficiency and greater concern for the environment, or as a financial and political issue?

Energy efficiency and care for the environment are issues that are hugely important to financial stability. A society that poorly utilises its energy and resources, and that destroys the environment excessively, faces numerous direct and indirect costs. The costs of missed development opportunities are huge, as are the health costs of environmental pollution. The inefficient use of energy also threatens energy security and renders you vulnerable in times of crisis, which makes it more difficult to make political decisions that yield the greatest development benefits. The link between energy efficiency, the state of the environment, finance and politics is essential and crucial. We hope that this will finally be recognised in an appropriate way, even if that comes with the help of the IMF, which does not necessarily have to consider all the noted benefits.

Among the many challenges that Serbia faces in the field of environmental protection, where is the key knot to tackle in order to start unravelling the ball of string that leads to the use of sustainable energy sources? This question isn’t easy to answer. I like to believe that the first step on that journey is to launch an urgent and all-encompassing battle against energy impoverishment through the implementing of reasonable energy efficiency

measures, primarily on the side of heating over a million households. The more efficient utilisation of energy will allow us to more easily finance the essential energy transition in energy production and to share those costs in such a way that it does not endanger health, lives and development opportunities.

Unlike in previous years, when pollution of the environment wasn’t a major topic, data on air pollution is today viewed almost as often as the weather forecast. Has this growing interest among citizens, and the fact that a large number of people die as a consequence of air pollution in Serbia, created pressure on public policymakers to address this topic more seriously? I think the positive answer to this question is unequivocal. Interest among citizens has created pressure and we are now watching how a response to that pressure is arising, slowly and not quite brilliantly. It nonetheless seems to be emerging, in which case it can also be improved upon.

When it comes to citizens who drive used cars that don’t satisfy European standards and those that have solid fuel burners, To what extent, and how, should the state help them to pollute less? Does the state actually do so, and if not why? How does policy in the area of energy prices

INCENTIVES

It is necessary to allocate significantly greater funds for subsidies to improve energy efficiency for the most vulnerable. This step must be very well devised in order to yield good results

impact on the kind of message that citizens receive?

The state has begun appearing as a participant in the financing of private investments for improving energy efficiency. Major financial resources are planned for this purpose, in my opinion completely unjustifiably, for subsidies related to vehicles. Over the last three years, significant funds have been channelled through multiple different support schemes to subsidise energy efficiency in private houses and residential buildings. For now, not one of these schemes has “hit the mark” among those who have the most inefficient appliances, given that the co-financing required to participate in these programmes simply isn’t available to almost a million households. In the city of Užice and the municipality of Priboj, decision-makers were more attentive and allocated a smaller part of the available funds for 100% subsidies for better heating devices for the poorest residents. That is an example that should be followed. It is necessary to urgently allocate significantly greater funds for 100% subsidies for the improvement of energy efficiency for the most vulnerable. This intervention must be very well devised, as it isn’t easy to help the poorest with the money of poor taxpayers. That chain of assistance can break quickly under the weight of ignorance. It is particularly problematic when the money of taxpayers helps those who aren’t the poorest.

As for the policy in the area of energy prices, suffice to say that the Energy Agency announced to

PRESSURE

Interest in air pollution levels among citizens has created pressure on public policymakers and we are now watching how a response to that pressure is arising, slowly and not quite brilliantly

FAILURES

it isn’t easy to help the poorest with the money of poor taxpayers, but it’s particularly problematic when the money of taxpayers helps those who aren’t the poorest

the citizens of the Republic of Serbia, in October 2021 and October 2022, that heating with natural gas is the cheapest in our country, in the midst of the energy crisis and the war in Ukraine. That’s abnormal and I’m not capable of finding another word that’s good enough to describe the message sent by such a pricing policy.

This year was the first time that we had a serious encounter with Serbian prosumers. How many of them could there be if the state had an appropriate incentive policy?

There could be very many of them. The state has really done a lot in

this area in the previous period, but it missed out on communicating in an appropriate way and received a worse solar image than it deserves. Increasing electricity prices will be incentive enough. It is essential to make it impossible to use non-existent obstacles on the network management side as an excuse and to eliminate the obstacles that really exist. And for us to learn to calmly differentiate between them.

Lastly, to what extent is Serbia able and capable of taking advantage of the fact that the European Union has shifted the deadline for achieving the goals

of the green deal from 2045 to 2030 and included Western Balkan countries in its support measures?

We, at the RES Foundation, have just completed our analysis of the assistance in this area that the EU has been providing to the Western Balkans since 2014, and we noted that huge room exists to improve the directing of this assistance among all stakeholders. In order for Serbia to utilise this postponing of deadlines and support, it must first have the desire to do so. It is possible to utilise this relationship in such a way that the Republic of Serbia improves the sustainability of its energy sources significantly, and without losing supply security and maintaining the reasonable availability of energy. The preconditions for us to reach that are much better management and a lot of knowledge.

The link between energy efficiency, the state of the environment, finance and politics is essential and crucial. We hope that this will finally be recognised in an appropriate way

TIJANA KOPRIVICA, CHIEF SUSTAINABILITY OFFICER, DELTA HOLDING

ESGFromVoluntaryToMandatory

From the very start, Delta Holding's business has involved taking care of the environment, providing support to the local community, and reducing harmful impacts on nature. Their business strategy has not only economic dimensions but is integrated with environmental and social development

the principles of CSR, which then easily grew into today’s ESG concept. In addition to economic strategy, we integrated ecological and social development plans into our business strategy. These strategic plans have resulted in an improvement of all aspects of sustainability, but also in a positive financial result.

Doing business while respecting the principle of sustainability is the obligation of every company because the business sector has a huge impact on the environment and society, and should play a major role in solving environmental and social challenges. Besides a sense of responsibility, today’s companies must have an ESG strategy to survive on the market because all stakeholders analyze companies from the viewpoint of sustainability. Investors and banks use ESG criteria to decide whether to invest in a company or lend it money.

They have proved that it is possible to reduce costs, increase revenues and at the same time take care of the environment, the local community, their employees and partners. They see the development of innovative solutions and the modernization of business as an investment that contributes to better results and business sustainability.

Caring for the environment, supporting the local community, reducing harmful impacts on nature is part of your corporate identity. Has it been like that from the start?

Delta understood a long time ago, at the beginning of the 2000s, that a successful business must be a responsible business towards all social groups it comes into contact with. Already then, we introduced

Companies that do not operate according to principles of sustainability, which include not only caring for the environment but also for their employees and society, risk being left without quality staff, long-term business partners or customers, and with higher costs as a consequence of energy inefficiency, higher fees due to environmental pollution, harmful gas emissions and so on.

Delta Holding has been bringing innovations to our market since its foundation. You don’t see this as an expense, but as an investment?

It all depends which innovations are involved. If we are talking about new jobs on this market, it certainly contributes to the creation of jobs, and if we are talking about a new product, we could say it will better meet the needs of customers in terms of functionality or quality. Technical achievements that we apply in production or in working procedures

D oing business while respecting the principle of sustainability is an obligation for every company because the business sector has a huge impact on the environment and society

contribute to greater workplace safety, faster and easier performance of certain tasks, they reduce consumption of natural resources and harmful gas emissions, help optimize costs....

We certainly see innovative solutions and business modernization as an investment that contributes to better results and business sustainability.

Digitalization has enabled you to increase yields and save resources, and at the same time contributes to the preservation of the environment. Can you give us an example?

Here for example: the digitalization of agricultural production has many advantages. Land mapping and screening, satellite imaging of a property has enabled us to collect all the necessary data for high quality information on the needs of crops and land. With this data it is possible to introduce variable sowing, variable irrigation, variable fertilization, etc. With variable fertilization, we save both the energy that drives the machinery and the fertilizer, which also reduces costs and preserves the land for future generations. With sensors that signal us when we have to irrigate crops, we save water and preserve the health of the plant and the fruit quality.

In our country, the trend of green construction has been accepted by only a few companies, among them Delta Real Estate, part of Delta Holding. What are the advantages of green construction? The advantages of green construction lie primarily in the well-being of people who live in these buildings and in the protection of the environment. For example, our new office building Delta House has a LEED Gold certificate, we used recycled materials to build it, such as UNIDOM plastic balls that reduced the use of concrete and thus CO2 emissions. The facade is made of the most modern materials, the most modern ventilation is installed with optimal energy consumption and with ionizers so that the air is of excellent quality. Two mini solar power plants and a rainwater tank for technical water are installed on the roof. A waste management system has also been established in Delta House. In the garage on the ground floor there is a recycling island for separating all kinds of packaging and other

types of waste. Everything I have mentioned shows the adaptability of this building to the needs of people and the demands for environmental protection.

Besides the benefits for people and nature, green buildings also provide secure income because there are more and more tenants who demand green building standards. In future it will be very difficult to sell or rent space in buildings that do not have environmental certificates.

bility standards. The new facade will have the highest level of energy efficiency, and the latest technical solutions will be used for heating, cooling and ventilation systems. Solar panels are already being installed on the roof of the building. This also implies optimal use of water as the most important resource, and a comprehensive waste management process. Green areas are also planned inside the congress centre. The project is aligned with EU Taxonomy criteria, and the building will have a BREEAM certificate.

It is known that you have solar power plants and biomass boilers in several places and that your goal is to provide at least 60% of energy from renewable sources by 2030. Are you on your way to achieving this?

So far we have built nine solar power plants, so our Delta House office building, the Intercontinental hotel in Ljubljana, four factories, two cold stores and the Napredak farm are already supplied with energy from renewable sources. Solar panels are currently being installed at our shopping mall in Varna, and we are also considering expanding capacity and building new solar power plants at 10 more locations. In the coming period we shall continue to analyze all possibilities for the use of energy from the sun, wind, geothermal sources and biomass. There is a lot of talk about the use of hydrogen as an energy source, so we are counting on the latest scientific and technological achievements that will make this energy source more accessible.

The project for the new Sava Center is aligned with EU Taxonomy criteria, and the complex will have a BREEAM certificate

All your new buildings are built in accordance with the latest developments, which means the use of environmentally friendly and recycled materials, and renewable resources. Is that a permanent commitment for Delta?

Yes, it is our permanent commitment. The same principle applies to works on the Sava Centre. The reconstruction project complies with the world’s most demanding sustaina-

Delta Holding has a long tradition of volunteering, and employees who are interested in actions aimed at preserving the environment. Do you still plant trees, clean and decorate the yards of schools and kindergartens, parks...?

Of course we continue with our volunteer activities. A volunteer environmental action is planned for September or October. In addition to the planting and arrangement of places in which our staff will participate, we are also planning actions that will involve the public in order to spread awareness about the importance of environmental protection.

StrategicApproach To Sustainable Business

For the Nelt Group, which has been growing continuously for 30 years, sustainability is considered as a crucial strategic factor that enables the company to progress towards its objectives. Alongside operational agility, technological advancements, and employee empowerment, Nelt Group prioritises initiatives and projects that have a positive impact in the long run- within the organisation, and also in the broader community. This approach aligns with the company's commitment to creating value for all stakeholders while contributing to a more sustainable future

ranks among the most successful business systems in the country and around the region. Could it also be said that this is your strategic, long-term direction?

With an ever greater focus on sustainability in all aspects of life, the sustainability of distribution and logistics companies like Nelt is becoming an increasingly important topic that needs to be thoroughly approached and implemented in practice. Investing in sustainability is an important aspect of business that helps to create long-term sustainability and contributes to improving the living environment for all. That’s why we approach this topic strategically at Nelt Group. This includes setting sustainability goals and monitoring their progress and their impact on the natural environment and society.

transport, we have implemented a series of initiatives to reduce harmful emissions. Through the managing and recycling of packaging waste, we work to reduce our “ecological footprint” by promoting this topic continuously, both internally within our organisation and beyond.

When it comes to transport, we reduce our harmful emissions through the procurement of vehicles in accordance with the criteria of the optimal utilisation of cargo space and the power required to successfully perform the task at hand. Additionally, by investing in a software solution to optimise sales and delivery routes, we impact on reducing CO2 emissions by 300 tons annually.

Through digitalisation, the building of “smart” warehouses and business premises, expansion of the existing Intermodal Terminal in Belgrade and the opening of a new one in Kruševac, the use of renewable energy sources and systems for monitoring energy efficiency,

as well as placing an emphasis on the importance of recycling, Nelt Group endeavours to elevate environmental awareness and reduce its environmental impact.

Environmental protection and sustainable development are crucial topics for the Nelt Group, which

You are continuously improving your environmental management system. What are the key aspects in this domain?

Our priorities include the rational use of natural resources and investments in renewable energy sources, as well as the use of technologies, equipment and materials that serve to reduce harmful effects on the environment. Given our primary impacts, which are realised through

To what extent does intermodal transport, which brings numerous benefits and the optimisation of operations, contribute to reducing the negative environmental impact of transport and logistics? How is that achieved?

Rail-based cargo transports have experienced huge growth around the world over recent decades. With global imports and exports having grown significantly, as well as an overall increase in logistics regionally, domestically and internationally, the global intermodal

Photo: Logistika i transport

freight transport market is expected to play a key role in the creation of expansion opportunities in the years ahead. This solution is characterised by numerous benefits: higher levels of security, lower prices, simplified goods tracking, reduced traffic congestion on roads and a major impact on environmental sustainability through reducing the number of vehicles on the road and minimising empty runs.

As a participant in global supply chains and the logistics partner of leading companies in various industries, Nelt provides an active contribution to this trend through its own rail and road freight container terminal in Dobanovci, as a so-called dry port. Our “dry port” terminal has rail connections to the region’s main ports, and thereby to the global economy.

We are planning to open another intermodal container terminal in the second quarter of this year, located in Kruševac. That will reinforce the region’s logistics infrastructure and mark the territorial expansion of Nelt’s logistics services portfolio. That terminal is located 10 km from Pan-European Corridor 10, immediately beside Dedina railway station and the future Moravian Corridor. With its strategic location and installed railway tracks, this intermodal terminal provides full logistics support to clients in the region from various industries, through a full dry port service: container handling, vehicle parking, weighing, customs representation, container delivery and shipping.

Nelt has been cooperating for years with company Sekopak, which deals with packaging waste management. Is there any existing data on how much you’ve saved on CO2 emissions in the previous period?

Taking care of waste and the use of non-renewable resources represent an integral part of our company’s business strategy and quality policy. By participating in

the system of packaging waste management operators, through cooperation with Sekopak, our company is able to reduce the amount of packaging waste that ends up in landfills, which also results in a reduction of CO2 emissions. Savings on CO 2 emissions recorded over the last three years totalled approximately 2,000 tons.

Alongside holistic waste management, all Nelt employees contribute to protecting the environment – from colleagues in the warehouse, who collect and separate waste during the process of preparing goods for distribution, to

office employees who use the waste separators installed in buildings and the ‘eco-island’ recycling facilities installed at Nelt’s distribution and logistics centres in Dobanovci, Niš, Novi Sad and Kraljevo. Waste classified in this way, together with packaging waste resulting from warehouse operations, is collected and pressed at the eco-yard that’s been established in Dobanovci.

How do you work to reduce NELT’s ecological footprint when it comes to the use of paper? With the Digital Delivery Note project, which we launched in 2020,

we have significantly automated our logistics processes to a significant extent, gradually phasing out paper documents to eventually use exclusively digital documentation, in order for us to be able to use digital documentation exclusively in future, as the end result. We are currently recording weekly reductions of 160,000 sheets of copier paper, which is 320 reems, or 800 kg of paper. Alongside savings of almost 65% on corrective documents, this means that we use 3.3 tons less paper per month. In this way, we annually save 1,000 trees that would otherwise have been used to produce paper!

Nelt takes significant steps towards sustainable development and work in local communities, in all markets where it operates, year after year. Are you continuing in the same direction and at the same pace?

We, at Nelt, are accelerating the pace, which is in line with our Accelerate 2025 strategy. Sustainability in logistics is crucial to the creation of a sustainable and prosperous future. Through cooperation with other stakeholders in the value system and the establishing of sustainable business strategies, it is possible to ensure a sustainable future for all.

The global intermodal freight transport market is expected to play a key role in the creation of growth opportunities in the years ahead

Photo: Vladimir Miladinović Piki

Photo: Vladimir Miladinović Piki

DRAGANA ĐORĐEVIĆ, INSTITUTE OF CHEMISTRY, TECHNOLOGY AND METALLURGY, UNIVERSITY OF BELGRADE

Will We Cook All The Fish?

Serbia remains a country of extremes – with territories of pristine nature, but a large number of areas where neglect, carelessness and poor public policies are destroying what we have

You can take an aquarium and turn it into fish soup, but you can’t turn fish soup into an aquarium... You’ve cooked the fish – It’s over! That’s history! - It might be a good idea to read this famous sentence of late Serbian Prime Minister Zoran Đinđić multiple times today, when we are thinking about the ways we want to direct the future development of Serbia, and primarily its ecological future. It is in that same context that we should probably also read one

Corruption, low mining rental costs, a lack of concern over environmental protection, cheap labour, a policy of low fines, the absence of state control mechanisms and the like – these are the reasons why ever more foreign mining companies are interested in opening mines in Serbia. Mining is the most destructive form of human activity for the natural environment

sentence of our interlocutor Dragana Đorđević from the University of Belgrade’s Institute of Chemistry, Technology and Metallurgy, who

says: “It is easy to take agricultural land and turn it into a mine, but a mine can never again be turned back into healthy, fertile land”. We

OXYMORON

A small country like Serbia cannot be a country with intensive exploitation of mineral resources, because it would be devastated completely and permanently. With intensive exploitation of minerals, “green policies” are not enforceable

interviewed Đorđević on the topic of the future of Serbia, which is being increasingly depicted as a country with enviable mineral wealth and a bright future from its exploitation. But let’s start from the beginning.

How do you view the quality of the natural environment in Serbia, based on the findings of your research work at the Institute?

Is it a country of pristine nature, as we like to think, or a country that is still a long way from taking care of ecology, as we fear?

Places of pristine nature exist in Serbia, while on the other side there are dirty technologies and energy sources based on poor quality coal - lignite, which traditionally pollute many towns and cities in Serbia, as well as the surrounding settlements. The open-air incinerating of various waste renders the air toxic. The attitude towards watercourses is one of negligence. The Bor River is Europe’s most heavily polluted river. Topčider River collects the runoff neglected industrial waste from former factories in Rakovica and carries pollution into the backwaters of the Sava, near the point where there are also three outlets releasing untreated faecal sewage, and all in the zone of the elite Belgrade Waterfront settlement. The absence of order in the waste management sector has led to the appearance of more than 3,000 wild landfills, which often catch fire. Farmers’ habit of burning fields to get rid of the leftovers after the harvest only serves to make the air even more polluted from the end of one agricultural season to the beginning of the next. Some problems in Serbia can, with political will, be solved.

There are numerous discussions being led in public about Serbia’s mining policies, both when it comes to the management of mineral resources in general and when it comes to specific projects, such as the exploitation of the mineral jadarite. From

PROFIT

SHPPs are being massively removed around the world, due to their disastrous impact on the environment. The SHPP concept of energy transition in Serbia is exclusively due to the profits of investors close to the government

your point of view, what are the most important unanswered questions when it comes to these topics?

Corruption, low mining rental costs, a lack of concern over environmental protection, cheap labour, a policy of low fines, the absence of state control mechanisms and the like – these are the reasons why ever more foreign mining companies are interested in opening mines in Serbia. Mining is the most destructive form of human activity for the natural environment. The exploitation of jadarite is particularly problematic, because the technology for processing it demands

INCLUSION

The greater inclusion of relevant science and professions in shaping public policies or making crucial decisions on the future directions of development is key to solving the problem

exploitation of mineral resources, because it would be devastated completely and permanently. Alongside the intensive exploitation of minerals, “green policies” are not enforceable. There are numerous examples around the world, such as the Republic of Congo, Madagascar, Papua New Guinea or Myanmar, and other small countries that multinational mining companies have devastated irreversibly. Serbia is primarily an agricultural country that’s rich in high-quality agricultural land (70% of the territory), which is in short supply around the world due to it disappearing rapidly and irreversibly. It is

It is planned to construct 856 small hydropower plants on small and clean mountain rivers on the territory of Serbia. They would collectively produce about three per cent of the total energy and completely annihilate watercourses of hills and mountains, while losses in the transmission network exceed 15% and nothing is being done to reduce them

enormous amounts of water and the use of huge amounts of concentrated sulphuric acid and other aggressive acids, while enormous amounts of CO2 would be emitted into the atmosphere. The processing of the mineral ore would occur in a lively and populated area, where people live very well from agriculture thanks to the fertile land and high-quality shallow groundwaters.

Geological research is currently being conducted on 179 fields in Serbia. What, in your opinion, are the most important criteria when we need to decide whether or not to enter into the exploitation of some mineral resource; and is it possible to be a country that has both the intensive exploitation of minerals and “green policies”?

Leaks of toxic mine water occurred already during the exploratory works, poisoning family drinking wells, artesian wells, farmland and surface water. A small country like Serbia cannot be a country with intensive

easy to take agricultural land and turn it into a mine, but a mine can never again be turned back into healthy, fertile land.

How would you rate the quality of the public debate on environmental protection in the context of managing mineral resources in Serbia?

It is practically impossible for the broader scientific community to participate in debate with the professional public, due to the shortness of the period from the announcing of a public debate to it being held, which is often during the period of national holidays or annual summer holidays, thus reducing the possibility of seriously studying the voluminous documentation that represents the subject of the public debate. It is the same case when it comes to the management of mineral resources in Serbia.

To what extent are colleges/faculties, institutes and scientific institutions in -

cluded generally in the shaping of state policies, on the one hand, and in public debate, on the other?

It is possible that individuals from the academic sector, who have close ties to the government, are involved more, but the academic sector is, as a rule, not consulted when it comes to making key decisions. Information related to key decisions that politicians make is largely unavailable to the wider academic sector.

Considering that you are also involved in debate on small hydropower plants, could you give us your assessment of the impact that these plants have on the environment in Serbia?

It is planned to construct 856 small hydropower plants on small and clean mountain rivers on the territory of Serbia. They would collectively produce about three per cent of the total energy and completely annihilate watercourses of hills and mountains, while losses in the transmission network exceed 15% and nothing is being done to reduce them. Mountainous and hilly regions experience strong, torrential erosions and landslides, which are among today’s most urgent issues identified by global science. For example, it

The legislative framework is largely harmonised with EU standards when it comes to environmental protection. Application is lacking, along with the harmonisation of the punitive policy, which is inadequate when compared to the damage caused. That’s why many foreign investors are coming to Serbia

was shown in the Vlasina river basin that the launch of construction of a hydropower plant led to serious problems in the city’s water supply. Following rains and melting snow, erosive material descends from hilly and mountainous areas to the water catchment area of city water supply systems. This results in a break in the water supply until the catchment water is cleaned of mud, which can sometimes last days or even weeks.

Small reservoirs for small hydro plants also emit methane (marsh gas), which is also a greenhouse gas with a much stronger potential impact than CO2. Toxic and carcinogenic oils that pollute the water are also used to lubricate the turbines. The plants’ transformers contain several hundred litres of oil, which occasionally boils when outflow occurs, and subsequently end up in the river. SHPPs are being massively removed around the world, due to their disastrous impact on the environment. The SHPP concept of energy

transition in Serbia is exclusively due to the profits of investors close to the government.

Where should we start when it comes to providing higher quality care for the environment? From amending, and better applying, the legislative framework, or from the greater involvement of the profession in shaping public policies, or from something else entirely?

The legislative framework is largely harmonised with EU standards when it comes to environmental protection. Application is lacking, along with the harmonisation of the punitive policy, which is inadequate when compared to the damage caused. That’s why many foreign investors are coming. The greater inclusion of relevant science and professions in shaping public policies or making crucial decisions on the future directions of development is key to solving the problem.

SavedEnergy IsTheBestEnergy

Serbia consumes 2.5 times more electricity than the world average per unit of social product, which should serve as an argument for us to make reducing energy consumption the number one imperative among our priorities

for us to make reducing energy consumption the number one imperative among our priorities. Are we more satisfied with new energy transformed from some other energy or happier and more successful because we need less energy? This is not only a philosophical question, because it isn’t difficult to simulate the effects of a scenario for our society where we would reduce consumption per unit of social product.

Projects for reconstruction of public lighting that were implemented in local self-governments by the Smart Energy Investment Kft confirmed that it is more justified to invest in energy efficiency than in renewable energy.

One of the first associations with the central topic of this Green Serbia special edition, “Thinking Green and Living Clean”, is energy, and the energy in question is the kind that’s obtained from renewable, green sources. The term “energy” associates us with the current war in Ukraine, the energy crisis in Europe, the financial market crisis that emerged with the raising of reference interest rates, as well as the whole economy. In such a situation, it is justified to make efforts to solve energy challenges. The impression that one gets is that a primary solution in attempts to overcome this challenge is the production of renewables, or “green” energy.

Were the laws, namely the natural laws of physics and the laws in terms of legal norms, ig-

nored when determining the priorities in this case?

The first law of thermodynamics states that “energy can neither be created nor destroyed, only altered in form”. Whether the “green” transition from one form of energy to another will disturb some other balances in nature, just as non-renewable sources disturbed our balances, may be known in the future. The legal framework in Serbia considers energy efficiency as a new source of energy, as is the case in the EU and probably most countries around the world.

A question arises as to whether these two different laws are sufficient for energy efficiency to be ranked first among the priorities in the fight for energy stability. The fact that Serbia consumes 2.5 times more electricity than the world average per unit of social product should serve as an argument

Based on the experience of our projects for the reconstruction of public lighting in local self-governments, we confirmed that it is more justified to invest in energy efficiency than in renewable energy. The benefits of the investment are more quickly achievable for both parties (public and private) because investment and construction operations are simpler and the “new” saved energy is available more quickly. The economic effects on society are more significant. Apart from energy and financial savings, long-term qualitative effects are also achieved, such as increased quality, comfort, and safety. As such, methodologies that function according to the “value for money” principle are moving to a more advanced “value for people” principle, which is better at achieving the Sustainable Development Goals (SDGs).

The average price that our public partners pay for directly saved MWh is fixed at slightly less than 90 euros for the entire duration of the project, and that includes all costs (excise duties and fees).

That is the value that they will pay less to the supplier, assuming that investment and maintenance costs are ignored, which he received free of charge as part of that price. This value is equivalent to the spot market price, less than 70 euros/MWh. The excess energy generated is a new social product, obtained with less energy consumption, which can be sold at a higher price.

We believe that these are sufficient reasons that the slogan “Thinking green and living clean” has energy saving in its essence, because saved energy is the best energy, according to all parameters.

The legal framework in Serbia considers energy efficiency as a new source of energy

GIULIO BOCCALETTI, UNIVERSITY OF OXFORD’S SMITH SCHOOL OF ENTERPRISE AND THE ENVIRONMENT

In Defence Of Nature-Based Carbon Markets

Though carbon-offset schemes are riddled with complexity, there is no question that they pay for something that matters. Far from being a secondary concern, supporting the natural systems that manage the stocks and flows of carbon through the planet’s ecosystems is essential to humans’ survival

Voluntary markets for carbon offsets have recently come under fire, with critics questioning the efficacy of contracts that aim to reduce atmospheric carbon dioxide relative to what would have happened in the contract’s absence. The biggest concerns are about “nature-based” projects involving various land-use changes – such as protecting forests, planting new ones (afforestation), and so forth.

But these instruments’ imperfections are no secret. For well over two decades, ecologists and foresters have been working to develop more sophisticated methods to satisfy economists’ faith in market instru-

ments, and they have made good progress. Though offset schemes are still riddled with complexity, there is no question that they pay for something that matters.

Imagine seeing what the atmosphere sees.

The Intergovernmental Panel on Climate Change’s Sixth Assessment Report provides an outline of the planet’s carbon cycle, which makes evident the fundamental role of plants’ conversion of CO2 into cellulose and back on a massive scale. Terrestrial photosynthesis alone draws down 113 billion tons of carbon every year. By comparison, humanity added about 11 billion tons of carbon to the atmosphere last year.

The problem, of course, is that humans’ cumulative contributions go in only one direction, whereas the carbon captured by vegetation is normally balanced by an equal, opposite flow from plant respiration and degradation. By interfering with the climate system, we have thrown this balance off, adding a net flow of about 5.9 billion tons to the landscape and the ocean every year. In other words, the planet is drawing down only half of what we inject into the atmosphere.

Even a relatively small perturbation in this vast natural cycle can reach an enormous scale. That is why nature is such an attractive climate-mitigation option. Suppose we suc-

ceed in eliminating fossil-fuel combustion. Keeping global average temperatures within 1.5° or 2° Celsius of pre-industrial levels will still require substantial carbon removal. Estimates vary, but they are on the order of 200-300 billion tons removed by plants before 2100.

Nor will the story end there. The atmosphere contains about 870 billion tons of carbon in the form of CO2 (one-third of which has been added since industrialisation), and the carbon cycle connects that atmospheric stock to vast reservoirs. The largest is the ocean, which holds 900 billion tons at the surface and another 37 trillion tons deeper below. Terrestrial vegetation and soils also hold about 2.15 trillion tons, and permafrost contains another 1.2 trillion. As far as the atmosphere is concerned, losses from any of these reservoirs could easily exceed the carbon we burn (from the 930 billion tons that are sequestered in fossil fuels).

Far from being a secondary concern, managing the stocks and flows of carbon through the planet’s ecosystems is essential to keeping the entire Earth system in balance. But to carry out that task, we will need to think differently about the landscape. Landscapes and seascapes are not just the backdrop to our life. They are public infrastructure, and like all infrastructure, they must be paid for and maintained.

Since the 19th century, however, we have known that paying for infrastructure by rewarding its marginal benefit (as offsets do for nature-based interventions) almost never covers the total cost. Because public-utility infrastructure like a highway or an airport tends not to command a high enough marginal value, taxation must cover the rest. Whom to tax then becomes the most important question.

To illustrate the point, consider Brazil, whose ecosystems contain some 60 billion tons of carbon in above-ground biomass. One way to estimate how much this stock is worth is to assume that we value carbon at a given price, say, $50 per ton (halfway between the price in the regulated European market and nature-based offsets in voluntary markets). In this scenario, Brazil is home to ecosystems worth $10 trillion, which is over six times the country’s GDP and far greater than the value of its 13 billion barrels of oil reserves.

Now, how much should the world pay Brazil to keep that forest in trust for everyone? Assuming a 2% fee on the value of the assets (a reasonable rate for most asset managers), the country ought to receive $200 billion per year. On those terms, Brazil would almost certainly put a stop to deforestation in the Amazon.

But here we run into a sad truth. There is simply no evidence that the international community has any appetite to pay such

this mechanism’s shortcomings, at least it directs some money – albeit a drop in the ocean – toward carbon-landscape management.

Of course, additional scrutiny of offsets is welcome for driving improvements. But it would be a fatal mistake to conclude that protecting forests or augmenting Earth’s carbon sink is any less urgent than reducing fossil-fuel emissions. Nature-based offsets traded in voluntary carbon markets should be seen as merely a first step. In the end, we will

Nature-based offsets traded in voluntary carbon markets should be seen as merely a first step. In the end, we will need to do “all of the above”: end fossil-fuel combustion, maintain ecosystems, and augment nature’s capacity to draw down carbon, regardless of whether we can prove that such reductions would not have happened anyway

sums. In 2022, total overseas direct assistance amounted to just $186 billion. For years, rich countries have failed to honor a 2009 pledge of mobilising $100 billion per year to help developing countries adapt to climate change.

By thinking of natural assets not as infrastructure but as service producers, we end up relying on the voluntary payments companies make at the margin in exchange for “offsetting” some other reduction that they cannot or will not carry out. But, for all

need to do “all of the above”: end fossil-fuel combustion, maintain ecosystems, and augment nature’s capacity to draw down carbon, regardless of whether we can prove that such reductions would not have happened anyway.

The atmosphere does not care about our motivations, counterfactuals, or moral hazards. All it sees is carbon flowing in and out. Ecosystems store carbon and draw it from the atmosphere at scales that matter. All of us – taxpayers, consumers, and companies –must pay for this critical public good.